Research in the Unit of Neural Network Physiology is primarily concerned with the cortex-basal ganglia system, which is important for movement control, reward mediated behavior, and higher cognitive functions. Basal ganglia dysfunctions, e.g. those that arise from a dopamine imbalance in the striatum, are correlated with severe movement disorders, e.g. Parkinson?s disease and cognitive disorders e.g. Schizophrenia. In our work, we reconstruct parts of the cortex-basal ganglia systems in vitro by culturing young rat or mouse brains for up to several months. These neuronal co-cultures provide the most complex in vitro system that exists to date: a 6-layered cortical network that drives activity in a striatal network and also receives dopaminergic inputs from the substantia nigra. The system comprises of several hundred thousand of neurons and replicates network activity that strongly resembles that seen in vivo. Taking advantage of this approach, we are in the unique position to study single neuron electrophysiology, synaptic transmission between neurons, and neuronal populations within and across nuclei under in vivo-like conditions. This year?s research further developed the following two aspects of information processing in the cortex-basal ganglia system. (A) Dynamics in cortical networks We recently provided the first demonstration that cortical networks operate in a ?critical state?. At this stable state, the network is maximally excitable without being epileptic. Using multi-electrode arrays in combination with organotypic cultures and acute slices, we demonstrated that propagation of synchronized activity in the critical state takes on the form of ?neuronal avalanches?, which are neither wave-like, nor rhythmic, or random. These ?neuronal avalanches? are described by a power law with slope ?3/2 and a branching parameter of 1 at which they retain maximal information as they propagate through the network (Beggs and Plenz, 2003). During the last year, we demonstrated that ?neuronal avalanches? are highly diverse, yet temporally precise at the millisecond time scale and reoccur over many hours. They thus fulfill many of the requirements expected of a substrate for memory, and suggest that they play a central role in both information transmission and storage in cortex (Beggs and Plenz, 2004). (B) Striatal processing of cortical inputs Using calcium imaging from distal dendrites, we were the first to demonstrate that number of back propagating spikes controls dendritic calcium during ?up? states, the characteristic network state of the striatum in response to cortical inputs, (Kerr and Plenz, 2002). This last year, we demonstrated that the precise timing between ?up-state onset and delay to first action potential also determines dendritic calcium through an NMDA mediated mechanism (Kerr and Plenz, 2004). These findings pave the way for spike-time dependent plasticity rules in striatal processing of cortical inputs.